Beware the rogue letting agents
This increased competition is putting tenants at heightened risk of unscrupulous estate agents, so how do you protect yourself against these rogue rental sharks?
Across ARLA's 6,000 rental agents, 74% believe that demand is currently outstripping supply and this has been the case for the past four quarters. The increase in demand is particularly acute in London and the south-east and suggests that there is insufficient supply of property to meet tenant demand.
The survey also found tenants are remaining in their properties longer, with the average rental period reaching a record high of 19 months, as tenants are wary of trying to find a new property in such a competitive market.
Tim Hyatt, president of ARLA, said: "The UK cannot rely on the rental sector to support the housing market in perpetuity. The reality is that there is a finite amount of rental property and unless both housing supply and mortgage availability improves then renters will find that their options in the market are reduced."
"Within such an intensely competitive market, we would advise tenants and landlords to seek the best possible advice from agents as there will be those that seek to exploit this situation."
Indeed with demand outstripping supply, many tenants find themselves in a vulnerable position of desperately seeking accommodation and this is when rogue estate agents strike. Last year there were 1,338 official complaints to the Property Ombudsman about estate and letting agents – the highest number since it was established 20 years ago.
The problem stems from lack of regulation in the letting industry which means unlike estate agents, letting agents are not required by law to register with one of the official regulatory bodies, such as ARLA, the Property Ombudsman or National Approved Lettings Scheme.
For both tenants and landlords, this means an increased risk of coming into contact with agents that charge vastly inflated fees and provide shockingly poor service.
Use a reputable agent
Until the government decides to regulate the industry, the onus is on tenants to caution themselves. The first step to avoiding rogue agents is to only use those that are registered with an official body. Not only will these agents be required to follow certain rules of conduct, it also ensures you have route of complaint should anything go wrong.
Tenants and landlords will be familiar with the sticky issue of fees involved in renting property, which in many cases seem vastly inflated for the amount of work involved for the letting agent. ARLA confirms that they do vary considerably upon local market conditions and the particular services being provided by the Agent – so it is different to pinpoint an average to compare to.
Most agencies charge for a fee for drawing up contracts and conducting credit and reference checks, and many also charge for drawing up an inventory. Then there are often more vague charges such as "administration fees" or "checking-in fees" which tenants should be wary off.
A reputable agent should be able to provide clear information from the outset on what costs will be occurred and exactly what is included in these charges. Get confirmation of any further fees that may occur later on – such as when renewing or ending the tenancy agreement - to avoid any nasty shocks.
Protect your deposit
It is crucial to protect your deposit for the property by ensuring it is paid into an approved deposit protection scheme, such as The Deposit Protection Service or My Deposits. This will ensure your deposit is held in a separate account, ensuring you get it back when the tenancy ends, and an independent third party will deal with any disputes.
Use your head
Finally, use common sense and do not sign a contract you aren't 100% sure about. If a property seems too good to be true, question whether there are hidden ties or charges, and equally remember if an agent or landlord seems dodgy, they probably are.
No one wants to be without a roof over their head, but it is generally worth spending a week longer on a friend or parent's couch to hold out for the right property, rather than rushing to sign the dotted line and getting involved in a nightmare tenancy.